Quarterly Actions Report for the Interval Ending 31 December 2023

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Overview

Galena Mining Restricted (ASX:G1A, Galena) owns 60 % of the Abra base metals mine positioned within the Gascoyne area of Western Australia – house to one of many largest lead and silver deposits on the planet, set to supply the highest-grade, cleanest lead focus accessible globally. The corporate is capitalizing on its Tier 1 asset in a Tier 1 jurisdiction, strengthened by and leveraging partnerships with Japan’s largest zinc and lead smelter, in addition to with one of many high base metals buying and selling companies on the planet.

The corporate additionally owns one hundred pc of the Jillawarra Challenge, which covers 76 kilometers of strike extension on to the west of Abra. The Jillawarra Challenge accommodates a number of large-scale analogous exploration targets together with the Woodlands Complicated, Quartzite Effectively and Copper Chert areas.

Galena’s main partnerships embody Toho Zinc (TSE:5707), Japan’s largest zinc and lead smelter, and IXM SA, one of many world’s high three base metals buying and selling companies. Toho offered AU$90 million challenge fairness and has a long-term offtake settlement to buy 40 % of Abra’s manufacturing; whereas IXM has entered right into a 10-year take-or-pay offtake contract to buy the remaining 60 %.

The corporate’s administration staff brings many years of expertise within the mining and base metals business and has a confirmed observe document of success all through all phases of exploration, from growth to manufacturing.

In November 2020, Galena put in place US$110 million in finalized debt amenities organized by Taurus Funds Administration. The amenities embody a US$100-million challenge finance facility plus a US$10-million price overrun facility.

The challenge finance facility consists of a 69-month time period mortgage primarily to fund capital expenditures for the event of Abra. Key phrases embody:

  • Fastened curiosity of 8 % every year on drawn quantities, payable quarterly in arrears.
  • 1.125 % web smelter return royalty.
  • No necessary hedging.
  • Early compensation allowed with out penalty.
  • 15 quarterly repayments commencing on 31 December 2023.

The associated fee overrun facility is a mortgage to finance recognized price overruns on the challenge in capital expenditure and dealing capital. Fastened curiosity of 10 % every year applies to quantities drawn underneath the associated fee overrun facility.

The Taurus debt amenities have been absolutely drawn and are secured in opposition to Abra Challenge belongings and over the shares that every of Galena and Toho personal in Abra.

Firm Highlights

  • Positioned to comprehend worth for shareholders:
    • Abra mine development accomplished in December 2022, on time and on price range.
    • First in-specification focus cargo achieved in March 2023.
    • Abra is without doubt one of the largest and cleanest lead-silver deposits on the planet (high-grade, high-value focus 1/tenth typical deleterious parts).
    • Thrilling exploration floor and recognized copper-gold mineralisation under the Abra lead-silver deposit.
    • JV between Galena (60 %) and Japan’s largest zinc and lead smelter Toho Zinc (40 %) underpins lengthy mine life (10+ years) in an thrilling new mineral province in Western Australia.
    • Galena has a 10-year offtake settlement with IXM, one of many world’s largest base metals merchants.
  • Annual steady-state steerage:
    • Mill throughput of greater than 1.3 million tonnes every year (Mtpa), producing +90,000 tonnes every year lead and +550,000 ounces every year silver.
    • Annual common lead C1 direct money price of US$0.55 to US$0.65/lb.
    • Annual common EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) of AU$90 million to $100 million.
  • The Abra mine is positioned within the Gascoyne Area of Western Australia, house to one of many largest undeveloped lead deposits on the planet and the highest-grade lead focus accessible, globally.
    • The Abra mine carries a JORC mineral useful resource estimate (July 2023) of 16.2 million tons (Mt) at 7.3 % lead and 19 grams per ton (g/t) silver within the indicated class, and 16.9 Mt at 6.9 % lead and 15 g/t silver within the inferred class.
    • Abra has been named the world’s lowest-cost major lead mine by Wooden Mackenzie, a number one mining analysis and consultancy group.
  • US$110 million of challenge financing debt amenities from main mining-specialist lending fund Taurus Funds Administration.
  • Galena’s administration staff brings many years of expertise within the mining and base metals business and has a confirmed observe document of success all through all phases of exploration, from growth to manufacturing.

Key Initiatives

Abra Mine

The Abra Mine is a 60:40 three way partnership between Galena and Japanese lead producer Toho Zinc. It’s a globally vital lead-silver challenge positioned within the Gascoyne area of Western Australia, between the cities of Newman and Meekatharra roughly 110 kilometers from the DeGrussa copper mine owned by Sandfire Assets (ASX:SFR).

Abra Mine Site Location

Abra Mine Web site Location

The Abra mine carries a complete JORC mineral useful resource estimate printed in July 2023 of 33.4 Mt at 7.1 % lead and 17 g/t silver (5 % Pb cut-off grade), which incorporates 0.3 Mt at 7.3 % lead and 32 g/t silver within the measured class; 16.2 Mt at 7.3 % lead and 19 g/t silver within the indicated class; and 16.9 Mt at 6.9 % lead and 15 g/t silver within the inferred class.

All permits for the Abra challenge have been obtained from the suitable Western Australian regulatory our bodies. The challenge can also be topic to an present land use and heritage settlement with the Jidi Jidi Aboriginal Company. The Abra property is well-serviced by public roads and highways, and all the required infrastructure has been developed to move lead-sulphide concentrates to the Port of Geraldton, Abra’s major export port.

Abra Processing Plant

Abra Processing Plant

A ultimate funding resolution to finish the Abra Challenge was made in June 2021 and development was accomplished in December 2022, on time and on price range. A number of essential milestones have been achieved within the March 2023 quarter, together with the commissioning of the processing plant, first ore fed into the plant and first focus produced in January 2023.

The processing plant achieved in-specification focus manufacturing from the graduation of focus manufacturing and in the course of the 2023 calendar yr, 967,622 tons of ore was processed and 61,800 tons of lead focus was produced.

The corporate is presently endeavor detailed technical work to develop an up to date manufacturing plan for 2024 manufacturing targets and steerage.

Jillawarra Challenge

Exploration and development related to the one hundred pc Galena-owned Jillawarra Challenge covers a extremely potential elongated tenement bundle overlaying roughly 76 kilometers of steady strike size and 508 sq. kilometers on to the west of Abra.

The Jillawarra Challenge hosts many base metals prospects which have had restricted shallow exploration work accomplished for the reason that Nineteen Seventies by varied firms. The majority of the exploration work was accomplished by Amoco, Geopeko, Apex Minerals and Abra Mining Restricted. The work accomplished to this point has recognized a number of base metals, manganese and gold prospects, of which the Woodlands Complicated, Quartzite Effectively, Manganese Vary, Copper Chert, TP and 46-40 have been topic to early-stage exploration. A lot of the drilling accomplished inside the Jillawarra Challenge investigated the primary 100 to 200-meter depth which, primarily based on latest data of Abra, could not have reached the depths required.

The primary potential hall inside the Jillawarra Challenge lies inside the margins of the Quartzite Effectively – Lyons River Fault zones which lengthen east-west alongside all the tenement bundle. Additionally, the contact between the dolomitic sediments of Irregully Formation and the decrease sedimentary unit, polymictic conglomerate, of the Kiangi Creek Formation represents an essential marker for the incidence of base steel mineralisation as seen at Abra.

The Woodlands Complicated is an Australian scaled geophysical anomaly which represents a major goal space with the anomaly being 12 kilometers lengthy and 10 kilometers extensive. Restricted work and technical analysis have occurred at Woodlands which presents a terrific alternative for Galena within the years to return. Ongoing geophysical and exploration drilling will happen concurrently with the event of Abra. The data and understanding of Abra resulting from its growth will present a major exploration benefit at Jillawarra.

Administration Staff

Tony James – Managing Director and CEO

Tony James is a mining engineer with over 30 years’ mine working and challenge growth expertise predominantly in Western Australia. He additionally has earlier expertise at managing director stage of three ASX-listed firms with two of these firms efficiently guided by way of a merger and takeover course of benefiting the shareholders. He has a powerful mine working background (examples being the Kanowna Belle gold mine and the Black Swan nickel mine) and a powerful feasibility examine / mine growth background (examples being the Pillara zinc/lead mine and the Trident/Higginsville gold mine).

Adrian Byass – Non-executive Chairman

Adrian Byass has greater than 25 years of expertise within the mining business each in listed and unlisted entities globally. He has served as non-executive and government director of varied listed and unlisted mining entities, which have efficiently transitioned to manufacturing in bulk, valuable and specialty metals world wide. He presently serves on the boards of ASX gold, base metals and lithium firms.

Neville Gardiner – Non-executive Director

Neville Gardiner has over 30 years of expertise advising boards on mergers and acquisitions,

fairness and debt capital markets, transaction structuring, capital allocation and complicated

business preparations. His profession achievements embody senior government management

roles in Deloitte, Torridon Companions, and at Financial institution of America Merrill Lynch, the place he spent 5 years as the pinnacle of its Australian Pure Assets Staff. He additionally spent 9 years with Macquarie Financial institution, the place he had duty for its Western Australian Company Finance enterprise and its Australian Oil and Gasoline Advisory enterprise. He has a really sturdy expertise and data base related to the sources sector in Australia.

Stewart Howe – Non-executive Director

Stewart Howe has greater than 40 years of expertise within the world useful resource business together with 18 years in mining. He was chief growth officer at Zinifex, one of many world’s largest miners and smelters of lead and zinc. He led the spin-off of Zinifex’s smelters to create Nyrstar NV, and restarted the event of the Dugald River mine.

Craig Barnes – Chief Monetary Officer

Craig Barnes has over 25 years of expertise in senior finance and monetary administration inside the mining business and beforehand the monetary companies business. He has appreciable expertise in challenge financing, mergers and acquisitions, joint ventures, treasury and implementation of accounting controls and programs.

Earlier than becoming a member of Galena, he held the place of CFO of Paladin Vitality for greater than 5 years and was a part of the staff that efficiently accomplished the corporate’s capital restructuring in 2018. Previous to that, he was the chief monetary officer of DRDGOLD (NYSE and JSE:DRD) and its affiliated subsidiaries for greater than seven years.

Aida Tabakovic – Firm Secretary

Aida Tabakovic has over 11 years of expertise within the accounting occupation, which incorporates monetary accounting reporting, firm secretarial companies, ASX and ASIC compliance necessities. She has been concerned in itemizing a number of junior exploration firms on the ASX and is presently firm secretary for quite a few ASX-listed firms



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